Shares of financial services company Visa Inc. (V) declined 2.7% to close at $225.50 in extended trade on Tuesday, even though the company posted better-than-expected fourth-quarter 2021 results that surpassed the Street’s earnings and revenue expectations.
Quarterly revenues grew 29% year-over-year to $6.6 billion, surpassing the consensus estimate of $6.52 billion. The rise in revenues was witnessed on the back of strong growth in Service revenues and International Transaction revenues. Both revenue streams increased 41% year-over-year.
The company posted earnings of $1.62 per share, up 44% from the same quarter last year. The figure topped the consensus estimate of $1.54 per share.
In the fourth quarter, Visa’s Payments Volume, Total Cross Border Volume and Processed Transactions witnessed a year-over-year rise of 17%, 38% and 21%, respectively.
For the full fiscal year ended September 30, 2021, the company reported net revenues of $24.1 billion, up 10% year-over-year. Notably, earnings of $5.91 per share rose 17% from the prior year.
The CEO of Visa, Alfred F. Kelly, Jr. said, “In a relatively tumultuous fiscal 2021, Visa delivered strong fourth quarter and full-year results, with double-digit net revenue, net income and EPS growth. Our performance was driven by the continuation of the recovery in many global economies and the increased diversification of our revenue with new flows and value added services.
“Looking ahead, Visa is even better positioned for the future as cross-border travel recovers and we continue to drive the rapid growth of digital payments and enable innovation in money movement globally.” (See Visa stock chart on TipRanks)
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Recently, Jefferies analyst Trevor Williams reiterated a Buy rating on the stock. The analyst, however, lowered the price target from $290 to $275, which implies upside potential of 18.6% from current levels.
Consensus among analysts is a Strong Buy based on 16 Buys and 1 Hold. The average Visa price target of $280.53 implies upside potential of 21%.
Visa scores a “Perfect 10” from TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations. Shares have gained 22% over the past year.
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